Poor Datatec results blamed on Westcon

Oct 16, 2013

Datatec has shown a slight improvement in revenues in its latest half-year results, blaming the poor performance of its Westcon North American operations and, in particular, problems that business has had implementing a new ERP system for its mediocre results.
The group reported revenues of $2,77-billion for the six months ending 31 August with EBITDA at $89,2-million compared to $91,9-million for the same period last year. Gross margin was up to 15% from 14,4% and underlying earnings per share were at 19,2 US cents, down from 23,5 US cents. Dividends of 8 US cents per share remain unchanged.

“Performance in parts of Westcon’s North American business, where the new ERP system has been implemented, has been disappointing,” says Jens Montanana, CEO of Datatec. “The volume shortfall in that region has been the main reason for the group’s underperformance in the period.”

He adds, however, that there were some silver linings among the Westcon clouds.

“Logicalis continues to execute strongly and in line with our expectations, and Analysys Mason has also performed well,” Montanana says.

“We are experiencing varying trading conditions in many parts of the world with Europe recently showing signs of improvement, while developing markets have been impacted by currency volatility,” he adds. “Our confidence in our long term-strategy has enabled us to maintain the interim dividend (capital distribution).”